Chapter 1 of OBS 210
Defines megatrends, logistics, and supply chain management explains 4th and 3rd party logistics. Porter's Theory for competitive advantage and the competitive advantage for the supply chain management.
CHAPTER 1:
Introduction to
Logistics and Supply
Chain Management
, 1. Megatrends
Megatrends are geo-strategic and macro-economic forces that are changing and shaping the world.
At the time of writing, the past decade has been a period of rapid change for business, most recently
the COVID-19 pandemic what’s impact has devasted global and local supply chains.
→ Globalisation
o The most significant factor that has changed business operations over recent years.
o Globalisation is the movement towards an integrated global economy, which has led to a
more intense economic and geopolitical environment.
o Globalisation also leads to the compression of time and distance and the disappearance
of traditional political boundaries.
o Business leaders cannot rely on traditional sources of supply or on traditional markets.
o Businesses have to function in the global arena in order to remain competitive.
o COVID-19 highlighted the risks and vulnerabilities of global supply chains, which cause
profound and disruptive effects on industries and consumers.
o More flexible and agile strategies will be required from government and business to
mitigate risks to supply chain.
→ The empowered customers
o Customers are empowered, educated and informed- more so now than before.
o The internet allows access to a wealth of information, anywhere.
o E-retailers, online catalogues and social media platforms provide a world of choice.
o Consumers can compare price service and quality with extreme accuracy.
o They therefore demand competitive prices, customised product offerings, convenience
and flexibility.
o Their service expectation is often constant, placing increased pressure on logistics
systems and various supply chain.
→ Shift in global economic power
o The rebalancing of global economic and business activity is transforming countries such
as Brazil, Russia, India and China (BRICs countries) from being sources of labour and
production to consumption-focused economies.
o The direction of capital flow has changed as these countries have become exporters of
innovation, capital and talent.
o New geographies and sources of supply may lead to new and different competitors’
profiles
o Mature markets may lose their influence and become less attractive for business.
→ Demographic Shifts
o Explosive demographic growth in certain geographical areas and declines in others will
more than ever contribute to resource scarcity, shifts in economic power and drastic
changes in societal norms.
o Trajectories differ among countries as some societies age rapidly, some grow
exponentially, and others shrink.
o Countries may have a young and growing population, which may create larger
workforces and markets for consumer goods. These shifts may increase pressure to
create jobs and may affect business models.
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